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Nilanjan Bhowmick AIR 3, CSIR NET (Earth Science)
Nidhi taparia Best Answer
The correct code is (4), because options a, b and c are correct. Let's see why. First of all please refer to the image to see the payoff matrices of each A and B firms. a is correct because Firm A does not have a dominant strategy. Because none of the strategies (advertise or not advertise) will for sure lead to a better result. Because elements of row 1 are neither all more or all less than elements of row 2. b is correct because Firm B does have a dominant strategy and that is to advertise. The elements of column 1 are all greater than column 2 in its matrix. c is correct because the Nash equilibrium does exist. Both firms will advertise, using row and col maximin approach respectively. This will lead to A gaining 11 and B gaining 6. Refer to the image for complete solutions.